I am a middle-aged immigrant Kiwi with professional background in engineering and a wide range of other interests. On this blog you will find essays on politics, society, science, technology, environment etc. Enjoy!

What went wrong with the West? (4)

The second pillar of post-WW2 prosperity in the West, free enterprise, became over the decades stifled by socialism. Definitions of socialism usually refer to public healthcare, “free” education and other social services made available to all citizens. I personally prefer to approach the issue from the other end. To provide “free” service governments must first collect taxes to fund it so socialism is a system which takes from one lot of citizens to deliver the goods to others. This is called income redistribution (in conservative circles also known as institutionalised theft). So, a true meaning of socialism is not the provision of social services for the general population – it is getting the “haves” to pay for it.

Income redistribution is a powerful de-motivator. It hits potential achievers with a double-whammy. On one hand individuals taking commercial risk expect to be rewarded for their efforts. The more redistribution through taxes is in place the less spoils are left for the earner. On the other hand a new, attractive, option emerges. Once the tax money has been chewed through by the government some of it gets spat out to the needy. Why not, instead of busting one’s guts to come up with a good idea to create a new business, become needy? Sure, the money is not quite the same but neither is the commitment, risk exposure and stress! Consciously or subconsciously this plays on peoples’ minds and affects their life choices. One can also become a part of the state machine; checking, controlling and regulating others. Another direct economical dimension of income redistribution is reduced competition. Start-ups require reinvestment – a lot of it – but it is so much harder to get things up and running if taxman reaches deep into the entrepreneur’s pocket.

The last nail in the coffin of free enterprise in the West was burdening the employers with enforcing the social agenda of the state. In the old days employers were expected to provide their workers with stuff to do and pay the wages. Apparently, in NZ, there was a saying that drainlayers only needed to know two things: shit flows downhill and the pay comes through on Thursday. But things are no longer simple or easy. The employers in the West must now enact gender equality, ethnic inclusion, fight racism, prevent sexual harassment etc. In the real life, rather than complying with the countless regulatory requirements in the West, it is a lot easier to open a sweatshop in Thailand or Philippines where the state interference is almost non-existent.

Painful as it may sound, there are others willing to do what we in the West can, while working for lower wages and without the overheads the state social agenda imposes.